Hosted VoIP service is Voice Over Internet Service that is provided by a third party for businesses with any number of phone extensions. The provider is responsible for equipment installation, software, operations facilities and technical expertise so as to enable the client to enjoy the benefits of an IP-enabled phone system. A hosted VoIP service provides a “virtual IP PBX” for an organization eliminating the need for a physical PBX. All calls are transported over the Internet, and telephone functions such as voice mail, call routing and call forwarding are performed on the provider’s computers. Administration is usually handled via a Web interface. The provider hosts the voice server and messaging hardware off-site at his datacenter. The clients make and receive calls, check voice messages online, filter incoming calls, add new employees to the system in minutes, etc. Hosted VoIP is tailored for small and medium-size businesses with limited IT resources who want to avoid the complexity and hassles of an in-house modern telephone system by opting for a third-party service provider.

Some of the major advantages of hosted VoIP services can be enumerated as,
Lower initial capital outlay as no VoIP hardware or software purchasing cost has to be incurred.

Seamless and transparent integration with most legacy systems, resulting in an easy changeover from traditional telephone system to VoIP. Client’s ability to increase and decrease capacity in accordance with business requirements such as seasonal peaks and financial downturns.

More adaptable than an in-house solution as it allows features to be added and changes to be made to accommodate the needs of the client’s business growth.

Participation of a company’s internal staff is not required, thereby savings in terms of human resource.

All troubleshooting is conducted remotely, eliminating the need for service calls and subsequent wait time. Provider ensures that clients enjoy access to the latest technology and that equipments do not become obsolete thus providing cutting-edge solutions. 24 x 7 monitoring by experienced staff ensures constant peak performance. Services are contracted and based on monthly charges or fixed flat-rate billing. Easier budgetary accommodation is possible due to predictable operating expenses. Many hosted VoIP services include value-add capabilities.

Because hosted VoIP services feature a service-level agreement, clients are assured that a hosted VoIP system will continue to perform at peak efficiency when faced with security threats, business continuity and disaster recovery.

All the above parameters point to the fact that hosted VoIP services are cost-effective has a lower Total Cost of Ownership, scalability and reliability.